What Is a Health Care System?

A health care system provides services related to maintaining or restoring physical, mental, and emotional well being. The services may be provided by physicians or other trained professionals, hospitals or clinics, or community-based organizations. They can include diagnostic, therapeutic, rehabilitative, maintenance, and monitoring services. Health care may also include counseling and education services. The aim is to improve the health of individuals and communities through prevention, treatment, and rehabilitation.

A high-performing health system meets the needs of all its people by providing timely, appropriate, and accessible health services at an acceptable cost. It does so through a combination of financing mechanisms, including private insurance, public health care, and direct patient payments. It also provides incentives for preventive care, primary care, and effective treatment of chronic disease. And it ensures that all have access to necessary health care services, regardless of their ability to pay.

In the United States, more than 48 million people lack health insurance and millions more are underinsured. Many who do not have health insurance forgo needed health care or seek care only when they become seriously ill. The result is that the quality of health care in this country lags behind that of other countries, even though it spends far more per capita on health care than those systems.

Health care costs continue to grow rapidly. In the 1980s, they rose by 15 percent each year for hospitals and physicians; in 1990, they accounted for 12 percent of federal and 11 percent of state budgets. The rapid growth of health care costs is a concern for many Americans who worry that they are only one illness or accident away from financial ruin.

The vast majority of adults have private health insurance, either through their employers (61 percent) or by purchasing individual policies (7 percent). Government-sponsored programs provide coverage for the elderly and the disabled. In addition, most countries require that employees contribute to a national insurance fund.

Employers offer health benefits to attract and retain workers, and to reward their workforce for their productivity and contribution to the economy. Employees usually pay a portion of the premiums through payroll taxes.

Top-performing health systems achieve universal coverage and high levels of protection against medical costs through a variety of policy measures. For example, some countries have eliminated copayments for physician visits and others have fixed annual out-of-pocket limits for covered benefits. They also address income-related equity through a mix of strategies, such as setting low annual spending caps for the poorest individuals and offering subsidies to encourage health-related savings by those who earn the least. In contrast, the United States lags behind other high-income countries in these measures, despite the fact that it spends more than twice as much on health care as these other systems. The Commonwealth Fund studies health systems around the world, looks for innovative practices, and compares them to the United States. Its findings are shown in this report. The results are mixed, but most important, the U.S. lags behind other high-income countries on processes of health care delivery, administrative efficiency, and outcomes.

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